Significant Capacity Expansion

As of now, the combined installed data centre capacity in Chennai, Bangalore, and Hyderabad stands at approximately 200 MW. This foundation is set to be significantly bolstered, with 190 MW currently under construction and an additional 170 MW planned. These developments are expected to increase the total capacity by 80% over the next few years, underscoring the region’s strategic importance in supporting global digital infrastructure.

City-wise Data Centre Dynamics

Chennai is a prime data centre hub due to its strategic coastal location, offering excellent submarine cable connectivity. The city has an installed capacity of 87 MW, with 156 MW under construction and 104 MW planned. The favourable climate and robust power infrastructure make Chennai an attractive destination for data centre investments.

Bangalore, known as the Silicon Valley of India, leverages its strong IT ecosystem. The city currently has an installed capacity of 79 MW, with 10 MW under construction and 26 MW in the planning stages. Bangalore’s technological prowess and availability of skilled workforce are key drivers for its growing data centre market.

Hyderabad is rapidly emerging as a data centre hotspot, thanks to proactive government policies and excellent connectivity. The city has an installed capacity of 47 MW, with 20 MW under construction and 38 MW planned. Hyderabad’s competitive real estate market and robust infrastructure are significant advantages.

Data Centre Market Data – Capacity

Source: Colliers

Government Incentives and Policy Support

State governments in Tamil Nadu, Karnataka, and Telangana have been instrumental in fostering data centre growth through a range of incentives:

Subsidies and Tax Benefits: Substantial subsidies on land acquisition, reduced power tariffs, and significant tax breaks are provided to make South India an attractive destination for data centre investments.

Infrastructure Development: Investment in power and telecommunications infrastructure ensures high-speed, reliable connectivity, a critical component for data centre operations.

Ease of Doing Business: Simplified regulatory frameworks and expedited approval processes reduce bureaucratic hurdles, encouraging swift project initiation and completion.

Dedicated data centre policies introduced by various states provide a clear, structured framework for investors, enhancing the region’s appeal.

Diverse Occupier Landscape

The occupier landscape in Chennai, Bangalore, and Hyderabad is diverse and dynamic. According to recent data, BFSI dominate the market, accounting for nearly 35% of total occupancy. IT firms follow with 30%, while Hyperscalers occupy 20% and other sectors constitute the remaining 15%.

Occupiers are increasingly seeking additional services to optimize their operations, which include:

Managed Services: Comprehensive IT management solutions that enable businesses to focus on core activities.

Security Solutions: Advanced security measures such as encryption, threat detection, and incident response services.

Disaster Recovery: Robust disaster recovery solutions ensuring business continuity in the face of unforeseen events.

Edge Computing: Proximity to end-users to reduce latency and improve service delivery, essential for IoT and real-time data processing.

Competitive Pricing and Service Offerings

The monthly recurring charges for data centres in South India are competitive, ranging between 6,650 – 8,500 INR/kW/Month according to the usage, offering significant value for money given the advanced infrastructure and extensive range of services provided. This competitive landscape ensures continuous upgrades and enhancements by service providers, meeting the evolving needs of occupiers.

Outlook

The outlook for South India’s data centre market in Chennai, Bangalore, and Hyderabad is exceedingly positive. The combination of strategic location, robust government support, and technological advancements positions these cities as pivotal players in the global data centre industry.

Demand for data centres is expected to rise continually, driven by increasing cloud service adoption, digital transformation initiatives by enterprises, and the advent of new technologies such as 5G and IoT.

South India’s data centre market, particularly in Chennai, Bangalore, and Hyderabad, is set for substantial growth, underpinned by significant investments, strategic government incentives, and a diverse occupier base. The competitive pricing, advanced infrastructure, and additional service offerings make these cities attractive destinations for data centre investments. As South India continues to develop its digital infrastructure, it is poised to play a pivotal role in the global data centre market, offering immense opportunities for investors and occupiers alike.

“The anticipated 80% increase in data centre capacity by 2030 across Chennai, Bangalore, and Hyderabad highlights the region’s growing strategic importance in the digital infrastructure ecosystem, with sustained government support and continuous infrastructure development, South India is set to become a global data centre hub.”, says Swapnil Anil, Executive Director & Head of Advisory Services, India

Chennai Data Centre Ecosystem

Of the South Indian State, Tamil Nadu State witnessed a positive growth and revive & contribute heavily to India’s GDP. It’s evident that the Southern metropolis always has been a ‘favourable’ investment destination and has a significant proportion of investment proposals of INR 50,000+ crores.

Comparing the industrial ecosystem, Tamil Nadu, always been leading in automobile, wind energy, and electronics hardware manufacturing sector. However, in the recent years, due to the stable system of governance and its related policies, Tamil Nadu, especially the Chennai region has emerged as a data centre capital of India.

The government is also proactive in providing 24/7 power facilities, followed by land, connectivity infrastructure for DCs, fiscal & non-fiscal incentives, and promoting renewable energy use for everyday management. This has created a supportive technology bubble and also acts as a catalyst for industries to set up data centres.

It has to be noted that Tamil Nadu was the 1st state to come up with ethical AI, blockchain, and cyber security policies in the country. And Chennai is already geared up to provide a ready, built and well-established supply chain for data centres to integrate scale within the region.

Chennai is a prime data centre hub due to its strategic coastal location, offering excellent submarine cable connectivity. The favourable climate and robust power infrastructure make Chennai an attractive destination for data centre investments. Chennai is also a popular option for DC colocation firms since it provides an abundance of experienced IT & Non-IT talent, along with strong manufacturing bases and lower setup costs. As a whole, the city is an excellent location for data centers because of its attractive cost structure and ample land supply.

“Chennai data centre market exemplifies the city’s commitment to technological advancement and innovation. With its strategic coastal location, robust government initiatives with respect to the Industrial Policies and sector specific Policy for Data Center including the Cyber Security, followed by the support infrastructure facilities and availability of developable land parcels at low cost, Chennai will continue to drive and lead the digital economy forward.”, said Umakanth Y, Senior Director, Advisory Services, Colliers India.

Also Read: India’s Data Centre boom to drive 10 million sq. ft. real estate demand

The post South India’s Data Centre Market to Witness 65% Capacity Growth by 2030 appeared first on Square Feat India.

Prashant Sharma, President, NAREDCO Maharashtra:

Sharma underscores the need for enhanced tax incentives for homebuyers, advocating for increased limits on deductions under Section 80C and Section 24(b) to boost housing demand. He also calls for a single window clearance system to streamline project approvals and incentives for affordable housing, including extending benefits under the PMAY and redefining affordable housing to include properties up to Rs. 1 crore in metro cities. Addressing liquidity issues by ensuring easier access to financing and expanding the SWAMIH stress fund is also crucial. Simplifying land acquisition and promoting rental housing policies are essential for urban development. Mr. Sharma believes these measures will revitalize the sector and contribute significantly to economic growth.

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Vice President, CREDAI-MCHI:

Chivukula highlights the importance of increasing tax deductions on home loan interest to stimulate residential demand. He advocates for a single-window clearance system to expedite approvals and incentives for affordable housing, such as extended tax holidays and increased PMAY allocations. Rationalizing GST rates and granting infrastructure status to the real estate sector will facilitate easier access to funding. He emphasizes the need for sustainable development policies and incentives for rental housing to meet urban housing needs. Special provisions for reviving stalled projects are also essential for market stability.

Vedanshu Kedia, Director, Prescon Group:

Kedia calls for a rethinking of the GST structure, advocating for input tax credit and rationalization of GST rates to make real estate more affordable. He urges revisions in capital gains taxation, reducing the holding period for long-term gains and increasing exemptions under Sections 54 and 54EC. Enhanced infrastructure development and incentives for NRIs to invest in Indian real estate are also critical. Supporting millennial homebuyers with incentives and focusing on senior living solutions are necessary to address demographic trends. Overall, he seeks policies that enhance transparency, reduce regulatory bottlenecks, and promote sustainable development.

Samyak Jain, Director, Siddha Group:

Jain emphasizes the need for tax benefits, easier access to credit, and improved liquidity to sustain the sector’s growth. He advocates for targeted schemes for millennials and first-time homebuyers to boost demand. Increased budgetary allocation for infrastructure development in cities like Mumbai is essential to unlock new development regions. These measures will foster a conducive environment for real estate growth, contributing to overall economic development.

Shraddha Kedia-Agarwal, Director, Transcon Developers:

Kedia-Agarwal anticipates policies that stimulate the housing market, such as tax benefits for homebuyers and reduced GST rates. Simplifying FDI processes and making them more attractive to foreign investors is crucial for bringing capital into the sector. She calls for policies that make it easier for NRIs to invest in Indian real estate, alongside substantial budget allocations for infrastructure development. These steps will benefit ancillary industries and create numerous job opportunities, supporting overall economic growth.

Rohan Khatau, Director, CCI Projects:

Khatau stresses the importance of enhancing the tax deduction limit on home loan interest and investing in social infrastructure to drive real estate demand. Simplifying FDI norms and promoting sustainable development practices are also key. He advocates for substantial budget allocations for infrastructure improvements, which will open new areas for development and provide more opportunities for both developers and homebuyers.

Himanshu Jain, VP – Sales, Marketing & CRM, Satellite Developers Private Limited (SDPL):

Jain highlights the need for continued support for affordable housing initiatives, especially in metro cities. Enhancing tax benefits for homebuyers and increasing budget allocations for infrastructure development are crucial for the sector’s growth. He also calls for reforms and incentives to boost commercial real estate and promote REITs, which will bring in much-needed capital and provide investment opportunities.

In summary, the real estate sector looks forward to a budget that addresses these critical areas, fostering growth and stability while contributing significantly to the nation’s economic recovery and development.

The post Real Estate Sector anticipates growth and stability from Union Budget 2024-25 appeared first on Square Feat India.

The Data Centre (DC) industry in India is set to witness remarkable growth, with projections of adding 791 MW capacity by 2026. This expansion will drive a demand for 10 million sq. ft. of real estate space, attracting investments worth USD 5.7 billion. The surge is primarily fuelled by the increasing adoption of Artificial Intelligence (AI). As usage of AI gains pace, the demand for Indian DCs is expected to be in the range of 650-800 MW during 2024-26.

Source: JLL Research

The exponential growth in computing power and the resulting new applications are expected to drive strong demand for DC industry over the medium term.

Cloud Service Providers (CSPs), who essentially offer IT infrastructure systems primarily for data storage and computing power accessible through the Internet, have realigned their requirements to factor in AI-led demand. The CSPs have also announced higher investments to scale up AI-led growth.

“The exponential growth in processing power and data volumes, driven by AI, necessitates the development of new data centres capable of meeting energy, processing, and cooling needs. The anticipated expansion and progression of diverse AI disciplines are projected to create additional demand for data centres, expanding their capacity requirements and advancing their capabilities” said Rachit Mohan, APAC Lead – Data Centre Leasing and Head – Data Centre Advisory, India, JLL.

Improved absorption during H2 2023 (July-Dec 2023)

During the second half of 2023, there was a 12% increase in absorption to 81 MW compared to 72 MW during the same period last year. This growth can be attributed to CSPs gaining momentum after a brief hiatus during the first half of 2023. In Mumbai, absorption nearly doubled during this period as CSPs renewed their pace of absorption.

“India is poised to be the third-largest economy, with a projected USD 5 trillion GDP by 2027 with digital economy contribution of around 20 per cent. This digital expansion is anticipated to propel the growth of India’s data centre industry, projected to increase from 853 MW in 2023 to 1,645 MW by 2026. This increase in capacity will require an investment of USD 5.7 billion and approximately 10 million square feet of real estate,” said Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

There was a lower supply addition of 75 MW during H2 2023 as the available supply from the first half was utilised to meet the demand, resulting in tighter vacancy levels of 5.5%.

Source: JLL Research

India’s focus on AI is evident through the India AI mission, aimed at fostering innovation, upskilling the workforce, and ensuring responsible and ethical deployment of AI technology. With a large user market, talented workforce, and thriving startup ecosystem, India presents a significant opportunity to emerge as a global data hub, driven by sustainable practices. The country’s DC sector expanded from 350 MW in 2019 to 854 MW in 2023, in line with the increasing digital usage trends.

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In addition to their comprehensive design solutions, APICES Studio Pvt Ltd specializes in building Data Centres, IT Business centres, Residential and Mixed-Use complexes, now broadening their expertise across diverse sectors. APICES is poised to lead this collaboration as an established architectural firm since 2004 with a broad outreach encompassing diverse projects. The firm will engage directly with clients, understanding their projects holistically while entrusting the healthcare component to the expertise of HOSMART. With its dedicated focus on healthcare, HOSMART will oversee aspects such as space planning, equipment planning, workforce allocation, and all other healthcare-related requirements specified by the clients.

Commenting on the collaboration, Hardik Pandit, Director of APICES Studio Pvt Ltd, said, “We are thrilled to embark on this collaboration with HOSMART, a company that brings unparalleled expertise in healthcare facility management and design. This partnership allows us to combine our established platform with HOSMART’s specialized technicality, offering clients a seamless and comprehensive approach to healthcare facility development. Together, we aim to address the evolving needs of the Indian healthcare market and contribute to the growth of the healthcare vertical.”

Incorporating cutting-edge technology into every facet of healthcare design, APICES Studio Pvt Ltd will introduce a pioneering approach that will integrate Virtual Reality (VR) experiences and harness the efficiency of Artificial Intelligence (AI) within architectural and interior healthcare solutions. This innovative utilization of VR will offer clients immersive walkthroughs, enabling them to experience and fine-tune designs in a virtual environment before physical implementation. Simultaneously, AI algorithms will be employed to optimize spatial layouts, streamline operational efficiencies, and enhance user experience. By seamlessly weaving VR and AI into the fabric of their designs, APICES will redefine the boundaries of traditional architectural practices, ensuring that healthcare spaces not only meet but exceed the evolving demands of the industry while setting new benchmarks in user-centric design innovation.

The collaboration will primarily target private players in healthcare, including independent doctors looking to establish their healthcare facilities, ranging from mid-sized to large-scale facilities. Additionally, the partnership will extend its reach to the public sector, collaborating with state governments to expand the number of beds and ICU facilities within various regions.

Ar. Yadneshwar R Pathak, Director of HOSMART Healthcare, emphasized, “Post COVID Era, it’s the phase where all industries are aware of the NEED for the number of beds in Cities and Towns. The Healthcare fraternity, Doctors with all their excellence in their field are more willing to add better infrastructure to their healthcare setups. Other non-medical businesses are looking at healthcare as their social responsibility as well as a reliable option to diversify their businesses. Governments of all developing countries from Africa, North Asia, South East Asia, and South America have increased the funding and are also ensuring that there is an upsurge in the development of the Healthcare sector holistically.”

He continued, “We at HOSMART, work purely for the passion towards healthcare research and have established the organization in Thane, where the collaboration with a senior establishment like APICES Studio Pvt Ltd is a big opportunity to strengthen the workforce collectively with complimentary and comprehensive intelligence to the field of healthcare for technically advanced, precise, and cost-effective solutions.”

One of the critical features of this collaboration is its global perspective. APICES plans to focus on taking care of international healthcare requirements wherever needed, partnering with HOSMART, which already has a presence in Africa and is exploring opportunities in South America and Ukraine. The partners aim to continue to uphold international healthcare facility planning and design standards, ensuring a uniform and high-quality approach to healthcare infrastructure globally.

With this collaboration, APICES Studio and HOSMART are committed to achieving excellence in healthcare design through the pursuit of nationally and internationally recognized certifications such as IGBC, LEED, and WELL. These certifications underscore the dedication to sustainable, environmentally conscious designs prioritizing the health and well-being of occupants. Additionally, the collaborative approach involves employing Building Information Modelling (BIM) simulations, ensuring precision and efficiency throughout the design and construction phases. As healthcare strategists and facility planners, HOSMART boasts an integrated team comprising Doctors, Hospital Administrators, Medical Planners, Architects, Engineers, Interior Designers, Bio-medical Experts, Chartered Accountants, IT specialists, and Communication experts, all under one roof. Recognizing healthcare as both a noble service and a business endeavour, HOSMART specializes in simplifying operational complexities for healthcare providers, aligning designs with their vision, and ultimately crafting facilities that harmonize tradition with innovation.

With APICES managing statutory approvals from municipal authorities and HOSMART handling medical licensing and other clearances from healthcare authorities, the collaboration streamlines the client development process while synergizing the core competencies and ensuring to deliver paramount efficiency. The collaborative effort reflects APICES and HOSMART’s commitment to revolutionizing healthcare facility development, designing spaces that meet the highest standards of functionality, aesthetics, and compliance.

Also Read: How Infrastructure Projects are Creating New Real Estate Opportunities

The post APICES Studio Pvt Ltd Announces Strategic Collaboration with HOSMART for Healthcare Facility Development appeared first on Square Feat India.

Raiden Infotech India Pvt Ltd an entity of Google Inc has leased Data Centre, Plot No. D31 & D32, T.T.C Industrial Estate, MIDC, Village Bonsari, Navi Mumbai .

According to documents accessed by SquareFeatIndia provided by CRE Matrix, a real estate data analytics firm, the total area of the data centre is 3,80,945 sq. ft.

Documents revealed that lease term is for 28 years, the rent escalation is 1.75% Annually, whereas the rent commencement date is 24 Months from Commencement Date.

The deal was signed in OCtober 22, between Amanthin Info Parks Pvt Ltd and Raiden Infotech India Pvt Ltd.

Also Read: Amazon to pay Rs 1.4k Crore rent over 15 years for a data center in Thane

The post Google’s Raiden Infotech leases property in Navi Mumbai For $10.8 Lac Monthly rent appeared first on Square Feat India.

Data center growth during 2007 – 2022 (in mn sq ft)

Note: Data pertains to the top 7 cities: Bengaluru, Delhi-NCR, Mumbai, Pune, Hyderabad, Chennai & Kolkata Source: Colliers

Mumbai accounts for the largest share of data centers at 49%, benefitted from the presence of a landing station and submarine cable connectivity. Delhi-NCR has about 17% of the total data center capacity, followed by Bengaluru. While metro cities remain core hubs for data centers, Tier-II cities are also witnessing traction. Currently, Tier-II cities hold only 3% of the total data center stock in India. However, key data center operators are eyeing cities like Vijayawada, Nagpur, Raipur, Kochi, Patna, and Mangalore as potential locations for setting up edge data centers and as disaster recovery sites.

City-wise share of data center capacity 

Investments in data centers remain unfazed; cross USD10 bn since 2020

Since 2020, data centers have received cumulative investments of USD10 bn, and have seen surging partnerships between developers and global operators. The investments are from global data center operators looking to expand into India, investments from corporates and real estate developers, and private-equity funds. Rising data consumption, coupled with favorable government policies have spurred investments in the sector in the last 2-3 years.

“Data centers are capital intensive and investors with a long-term horizon are exploring this asset class. While real estate costs are only about 25%, there is ample opportunity for developers and investors in this space. At the same time, there is now a greater need to make data centers more sustainable. At present, only 22% of the existing data center stock is LEED-certified. Global operators are increasingly investing in low-carbon and energy efficient technologies to reduce the impact on the environment and achieve optimum efficiency. Edge data centers are the next big opportunity in India, as these data centers support the sustainable transition of data centers through smaller footprint, and lower energy consumption,” said Ramesh Nair, Chief Executive Officer, India and Managing Director, Market Development, Asia, Colliers.

“The data center Industry is at a breakneck pace at the moment, poised to double up the built space to 20 mn sq ft by 2025. India is getting positioned as a hub for data centers across APAC. With the challenge of expansion in other developed markets like Singapore, India is taking a steady growth linked expansion, connected directly with the end user consumption. With two landing station hubs connecting the country on the west coast and east coast, India managed to create a better fiber penetration into the country, which is leading to increased internal consumption. Edge data centers coupled with 5G launch is going to create additional opportunities in expanding the data center footprint across the country. These Edge data centers are going to create a huge opportunity in the rural employment in India, added Rao Srinivasa, Managing Director, Data Centers, Project Management at Colliers India.

“Indian data center industry has witnessed robust growth between 2012-22 growing at 21% CAGR, led by increased adoption of smartphones, e-commerce and cloud services. Hyperscalers are also rapidly gaining ground and ramping up their investments in India as they plan to set up multiple data centers across key cities. Realizing the market potential and abundance of opportunities in India, investments in data centers are likely to remain popular amongst investors.” says Vimal Nadar, Senior Director, Research, Colliers India.

Also Read: Amazon to pay Rs 1.4k Crore rent over 15 years for a data center in Thane

The post Data center stock to double in next 3 years to 20 million sq ft appeared first on Square Feat India.

In terms of IT capacity (nearly 1,015 MW), over 69% of this planned new supply will come up in Mumbai and Chennai, with 51% in Mumbai alone. Currently, there are 138 DCs across India spanning ~11 mn sft and having 737 MW of IT capacity (building ready). At least 57% of this current IT capacity is in Mumbai and Chennai collectively.

With the addition of this new planned supply, 2025-end will India hosting 183 DCs with ~24 Mn sft and at least 1,752 MW of total IT Capacity.

Devi Shankar, President – Industrial & Logistics and Data Centres, ANAROCK Capital, says “The current size of the India data centre industry is approx. USD 5.6 Bn and is bound to grow. The unprecedented crisis created by the COVID-19 outbreak has propelled the data centre business forward, providing an unexpected tailwind. Technology adoption and digitization across the sectors were fast-tracked globally and India also leap-frogged at least a decade in the last couple of years. The country’s total estimated data centre demand is expected to be 2,100 MW as of FY 2025, with a mix between hyperscalers and enterprises – 35:65 (excluding self-owned hyperscaler capacity).”

Meanwhile, there is additional potential of nearly 2,688 MW of future unplanned supply in India. Land for this supply has been locked in by DC operators, but the projects will likely be planned based on actual demand and/or outcome of earlier planned phases. While this represents land banking for providing scalability for future expansion to customers, this capacity must be judiciously released into the market to ensure price stability. Around 78% of this unplanned IT capacity is to be concentrated in Mumbai and Hyderabad.

Jeff Binwanger, Managing Partner, Binswanger, says, “Companies are really starting to relook where they are putting their operations globally, where they would like to relocate and where do they want to manufacture, distribute and set up their database and technology facilities. Data centres are currently a fulcrum for a lot of the decision-making, especially in Asia Pacific and in India.” 

Data Centre Trends

The report also highlights the various trends of a Binswanger-ANAROCK survey conducted amongst IT professionals in India to analyse trends in the Indian data centre industry, as perceived by professionals who manage data-related infrastructure within their organizations. The survey was targeted at ‘data managers’ from diverse industries and company sizes. The survey revealed some interesting trends:

• 30% of companies are looking at hybrid (cloud + data centre) hosting services for data management
• IT Infrastructure monitoring, assessment and design are top services that IT professionals are keen to outsource
• Top priorities of IT professionals are to bring in operational efficiencies and cost savings to their data centres, data compression and improving power usage effectiveness, and technology improvements
• Operator credibility/track record and future scalability are the top criteria in data centre selection
• 58% of IT professionals feel colocation is better than captive data centres
• 72% of professionals have witnessed data surges in their organizations post-Covid-19
• 64% of organizations are looking to power their DCs by more than 60% clean power in the next 2 years
• 67% of professionals find it challenging to recruit and retain quality talent in the IT domain
• Streamlining power procurement regulations and creation of large DC parks key Government support envisaged by the DC industry

Also Read: Data Centre industry in India to cross 1.3 GW capacity, grow 2.4X by 2024: JLL

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